With lenders still stingy, tachycardic markets, economists predicting a depression, and the presidential candidates face new pressure to come up with new ways to contain the crisis.
There are four different fiscal meta-policies floating around.
One -- direct capital injection into banks, which the Treasury Dept. is considering and which McCain's campaign opposes. The Obama campaign is OK with this. Conservatives call it socialism.
Two -- buying billions of dollars worth of packaged mortgage-based securities from banks...essentially clearing the balanced sheets. This is how the bailout plan was originally sold to Congress and Wall Street.
Three -- The government's purchasing mortgages at face value from banks and then renegotiating with homeowners, a.k.a., McCain's Homeowner Resurgence plan.
Four -- The Barack Obama / Democratic Congress's second economic stimulus package.
Policies #3 and #4 would require Congress to come back and do something extra; #3 -- McCain's new plan -- would require Congress to change the EESA law to void the taxpayer protection language.
And yet, McCain, speaking this morning, portrayed his plan as a short term measure that the government can do NOW... which just doesn't seem to be the case. From what I can gather, EESA provides for the government to renegotiate the terms of mortgages, but it does not allow the government to buy most of them at their face value.
NB: McCain said this a.m. that the funds for his program wouldn't be new... which contradicts what he said last night. Which is it? And why the confusion?
« Connecticut Sup. Court Will Rule On Gay Marriage Today | Main | Twitter While You Work » More On McCain's Plan: New Money, New Law?10 Oct 2008 11:13 am Comments (16)
Isn't it mildly important that the professional and academic economic consensus is with #1, Marc? I'd think you might want to include that with your "socialism" dig. 
He doesn't care about any of this. He just wants to be president so he can move his toy soldiers around on his virtual Risk board. He's a fraud, and always was. He makes Bush look cool-headed and practical.
There's confusion because McCain is confused. And it's not actual policy, it's sound bites. McCain came up with this on the fly during the debate and now Holz-Eakin has to try and massage it into something that's not totally ridiculous. They're making it up as they go along.
As Greg says, aren't we past the idea that McCain has the slightest understanding of any of his economic plans? If he has people who understand them, they aren't conveying that well. I'm with Ethan: The treasury is proposing 1, the economists seem to point there, let's do that. I don't care what McCain's angry mobs call it, and I don't care if Dems want to appear to care about the Middle Class with another round of checks. We don't need another round of $1000 checks; we need a long-term round of serious borrowing funding jobs to rebuild the infrastructure and Manhattan-project post-oil energy. Long-term spending that creates other jobs, not another chance to buy a flat-screen.
I just wonder what McCain is going to do when he gets into this economic debate; he seems to have no clear idea what his goals are in this crisis and how he thinks they can be achieved. That is his problem: he changes daily in his response and that freaks everyone the hell out and makes it seem he has no clue what he is doing.
As to the NB part.... Seems he is being consistent...here is his quote Asked if his mortgage plan would be "new money or part of the $700 billion" already appropriated by Congress for the Wall Street bailout, McCain said, "part of the $700 billion, new money, if necessary." Seems to me that is pretty clear, that it will be part of the existing funds...than new funcs would be needed IF NECESSARY. I don't see a discrepancy there.
by the way Marc this just in
And why the confusion? Because he's economically clueless Marc. Grow a pair and state the obvious.
Challenge, for Mark or anyone who is up to it: Name one idea, principle, theory, etc. that has been consistent in McCain's economic statements/plans in the last 3 weeks. Kinda hard, isn't it?
why the confusion? Do you have to ask?
McCain's policies are confused because McCain is confused. He's coasted along thinking that the old solutions worked out by Goldwater-Reagan, cut taxes, deregulate, do less with government, were adequate for every situation. He didn't need to understand them well enough to recognize their limits or make adjustments because McCain never imagined the need. McCain is stuck in the 1980s. He's "just an un-frozen caveman lawyer." Except this isn't an SNL skit or commercial -- it's the fate of our country. He and his party lack the mental tools to adapt so quickly. Hence the mixed messages and erratic behavior.
I think it's incorrect to say that #2 was "sold" to the public. #2 was presented as Ambinder outlines, but nobody was buying, which was what led to the rounds of negotiations.
Marc, I really appreciate your attempts to stay on top of McCain's changing proposal and explaining it all to us. But I really wonder if the reason why the plan is not holding up to your scrutiny is because it wasn't really a serious plan in the first place. A gimmick. Design to get the attention of the media. The Celebrity ads. The Palin pick. Lipstick. The 'suspension' of the campaign. Will he debate or not? Bill Ayres. Now the McCain Resurgence Plan. They're all gimmicks designed to win the media cycle. None of them to be taken seriously because quite frankly the candidate and his campaign doesn't take them seriously.
The McCain idea of buying mortgages at face value is a terrible idea. First, it rewards bad business practices and basically punishes solvent mortgages. Worse, it pumps air into an air mattress with a hole in it. Real estate prices have to return to reality and that means a lot of people will lose their shirts. There's nothing we can do for them right now but artificially propping up real estate values now only lengthens the misery and danger to the economy but pushes back the "bottoming out" that this sinking economy needs before growth can return.
& NOT A WORD ABOUT THE $440,000 SPENT FOR THE BIG BOYS PARTY = = GIVE 'EM MORE, LET 'EM PARTY & WE CAN ALL GO BACK TO SLEEP - - AFTER A YEAR PPLUS OF THIS,,, I FOR ONE AM TIRED MORE OF THE PUCKY...!!!
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How is anyone taking the McCain campaign seriously anymore? I mean they propose a plan out of the blue during the debate and now have spent the past few days putting out contradictory statements and explanations of what it is.
How much clearer can a campaign be that its not a plan to save the economy, its a plan to save a campaign?
Posted by Greg | October 10, 2008 11:24 AM